The Government is poised to retender its hugely contentious immigration IT programme, considered critical for efficient border security controls, alerting the likes of FTSE 100 giants BT and Capita to the £1.2bn contract.
The Home Office is still in protracted arbitration with US-based Raytheon, which is demanding a £500m pay-off after being sacked as lead contractor on e-Borders, a system that is meant to count each person entering and leaving the UK. The database has been a vital part of the strategies of successive governments for tackling illegal immigration.
Raytheon, axed in 2010 after the system was found to be at least a year behind schedule, has claimed the problems were caused by UK Border Agency mismanagement.
IT giant IBM and out-sourcing expert Serco picked up parts of Raytheon's contract, which focused on air passengers. A bidding process on the remaining parts of e-Borders, which include ticking off who has come in and out by rail and sea, has still not started, meaning that there is no chance of a complete system being ready by the original 2014 deadline.
However, Home Office officials are now working hard to assess how they can repackage the whole of e-Borders, including what Raytheon was working on, to attract bidders with sufficient capabilities to take on the contract. An industry source said that huge IT companies have started preliminary work on their potential pitches, as they expect a process to start within six months.
A Home Office spokeswoman said: "We have been clear that we are aiming to tender for new e-Borders suppliers and we hope to start that process before the end of the year. The intention is that this tender will include delivery of the current e-Border system as well as future developments."
The process is likely to take place against the backdrop of the arbitration, which an insider said is unlikely to be completed until February. A Raytheon source added that the parts of the system that are already up-and-running have "enabled the Home Office to apprehend several thousand people who shouldn't have come into the country".
Keith Vaz, the former Europe minister who now chairs the Home Affairs Select Committee that is looking into e-Borders' many difficulties, said: "Under successive governments the e-Borders programme has been the subject of chaos, confusion and profligacy. An effective e-Borders programme is essential to immigration."